ORDER
Jyoti Balasundaram, Vice President
1. The revenue is aggrieved by the order of the Commissioner of Central Excise (Appeals), upholding the order of the Assistant Commissioner mat clearance of goods, which are not specified under SSI Notification No. 01/93 and not required to be taken into consideration for the purpose of computing value of clearances of specified goods under notification.
2. None appeared for the respondents; hence we heard the Ld. DR and perused the records. We find that the issue stands squarely covered by the recent decision of the Larger Bench of the Tribunal in CCE, Surat v. Mahajan Processors Pvt Ltd., vide order No.M/285/WZB/2005/LEB dated 31/10/2005. The relevant portion of which we re-produce herein below:
This issue, in dispute, came up for the first time for consideration of the Tribunal in the case of Watts Electronics Pvt. Ltd. v. CCE, Kochi wherein the Tribunal held that aggregate value of clearances of specified goods by unit which started availing of the benefit of small scale exemption under notification 175/86 during the course of the financial year and not at the commencement thereof, has to be computed without including clearances at full rate of duty prior to availing of the benefit of SSI notification. This decision was overruled by the Larger Bench of the Tribunal in Ramakrishna Engg. Works v. CCE, Bolpur wherein it was held that first clearances referred to in notification 175/86 means clearances in chronological order upto the aggregate value of Rs. 30.00 lakhs which was the limit placed on aggregate value of first clearances of specified goods, and that clearance of goods on payment of duty are to be included for reckoning first clearances. The Bench relied upon the decision of the Hon’ble Madhya Pradesh High Court in B.K. Rubber Industries (P) Ltd. v. UOI wherein the High Court interpreted notification 65/81 dated 25.3.1981 as amended from time to time granting exemption to manufacturers of tyres, tubes and flaps from duty in excess of 40% ad valorem on condition that the aggregate value of first clearances made during the preceding financial year did not exceed Rs. 2.00 crores. This Larger Bench decision was followed by a subsequent Larger Bench in CCE, Coimbatore v. Marutham Textiles (P) Ltd. . However, in between these two Larger Bench judgments, a single Member of the Tribunal in the case of Shree Cables and Conductors (P) Ltd. v. CCE, Bhopal 2001 (135) ELT 1110 that notification 1/93 (providing for slab rates of duty to SSI units) was not required to be availed from the first day of the financial year and that the assessee could avail of exemption even from the middle of the financial year, following the ratio of Watts Electronics Pvt. Ltd. cited supra. This decision was approved by the apex court by dismissal of the civil appeal filed by the Revenue against the Tribunal’s order, as seen from 2002 (139) ELT A310. Subsequently, in the case of Dhanlaxmi Texturisers (order No. C-II 1529-54 WZB 2002 dated 25.1.2002, a Division Bench of the Tribunal upheld the contention of the department in appeal before the Tribunal that the date of first clearances for the purpose of notification 1/93 should be calculated w.e.f. 25.4.1994 irrespective of the fact that the manufacturers could not avail modvat credit prior to 20.5.1994 when the goods were manufactured by them, came to be covered under the modvat scheme. The Tribunal held that since the right to avail of exemption under the SSI notification existed independently, and therefore the value of clearances of goods on payment of duty from 25.4.1994 was to be considered for computing the aggregate value of first clearances. Against this decision, the assessee filed special civil application before the Hon’ble Gujarat High Court which, vide its order , upheld the contention of the assessee that the value of clearances was to be computed from the date on which they opted for SSI exemption, even in the middle of the financial year and quashed the Tribunal’s order. The High Court held that the Tribunal should have followed its earlier decisions in Watts Electronics supra, CCE, Coimbatore v. Sri Kumaran Spinners (P) Ltd. 1997 (73) ECR 894, CCE, Coimbatore v. Sellammal Spinners and Sharma Textiles . The High Court also noted that the Tribunal’s order in the case of Shree Cables supra following the earlier decision of Watts Electronics was upheld by the apex court. In other words, the Gujarat High Court’s order which is directly on the issue, has not proceeded only on the basis of the Tribunal’s order in Watts Electronics but also on the basis of Shree Cables upheld by the Supreme Court. When a civil appeal is dismissed by the Supreme Court even though without assigning reasons, it has the effect of binding precedent unlike in the case of dismissal of a special leave petition, as held by the Larger Bench of the Tribunal in S. Kumar’s Ltd. v. CCE, Indore following the apex court’s judgment in Kunhayammed and Ors. v. State of Kerala .
We also note that in the case of CCE, Rajkot v. Marmo Texturisers , the Tribunal has followed the Gujarat High Court’s decision in Dhanlaxmi Texturisers.
The Gujarat High Court has followed the binding precedent laid down by the apex court in the case of Shree Cables. For this reason and also for the reason that no contrary decision of any High Court on the issue of computation of aggregate value of clearances of specified goods for determination of eligibility to the benefit of SSI exemption under notifications 175/86 or 1/93 has been brought to our notice, we hold that the Gujarat High Court’s decision in Dhanlaxmi Texturisers impliedly overrules the decision of the Larger Bench in Ramakrishna Engg. Works.
3. In the light of the above decision, we hold that there is no ground to interfere with the impugned order and accordingly, uphold the same and reject the appeal.
(Dictated in Court)